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Differences of Economy, Economics, Economic and Economical

Economy, Economics, Economic and Economical are 4 vocabulary terms related to the topic of economy. Therefore, they are often confused with each other in terms of usage. In this article, PREP will help you clearly distinguish the differences between Economy, Economics, Economic, and Economical with examples to illustrate in more detail. Please check it out!

I. What is Economy?
1. 1. The usage of Economy
2. 2. Words/phrases associated with Economy
II. What is Economics?
1. 1. The usage of Economics
2. 2. Words and phrases associated with Economics
III. What is Economic?
1. 1. The usage of Economic
2. 2. Words and phrases associated with Economic
IV. What is Economical?
1. 1. The usage of Economical
2. 2. Words and phrases associated with Economical
V. Distinguish between Economy, Economics, Economic and Economical
VI. Exercises on Economy, Economics, Economic and Economical
1. 1. Exercises
2. 2. Answer
VII. Turn Your IELTS Goals Into Reality

I. What is Economy?

First, let's learn the definition and the words/phrases associated with Economy to accurately distinguish between Economy, Economics, Economic and Economical!

1. The usage of Economy

What is Economy? According to the Cambridge dictionary, Economy functions as a noun, meaning: the system of trade and industry by which the wealth of a country is made and used/ the saving of time, energy, words, etc. For example:

AI companies are driving the global economy.
Tourism can help to boost a weak economy.

2. Words/phrases associated with Economy

Words/phrases associated with Economy	Example
the global/ national/ local economy	Investing in small businesses is crucial for boosting the local economy.
the state of the economy	Analysts are closely monitoring the state of the economy to predict potential economic trends.
a slowing/ weak/ stagnant economy	The government is implementing policies to address a slowing economy and promote growth.
a booming/ strong/ robust economy	During the 1990s, Singapore experienced a booming economy with rapid industrialization.
stimulate/ boost/ jump-start the economy	Governments often implement stimulus packages to boost spending and stimulate the economy during a recession.
an economy grows/ recovers	After a period of recession, an economy typically recovers with increased employment and economic activity.
knowledge-economy/ service-economy/ cash-based economy	A knowledge-based economy relies heavily on intellectual capital and innovation for economic growth.
a slowdown/ downturn in the economy	During the global financial crisis, many countries experienced a significant slowdown in the economy, leading to widespread unemployment and financial hardships for individuals and businesses.

II. What is Economics?

Next, let's explore the definition and the words/phrases associated with Economics, along with detailed examples to distinguish between Economy, Economics, Economic and Economical!

1. The usage of Economics

What is Economics? According to the Cambridge dictionary, Economics functions as a noun, meaning: the way in which trade, industry, or money is organized, or the study of this. For example:

Maria is in her third year of studying economics at Star University.
I'm afraid my grasp of economics is rather limited.

2. Words and phrases associated with Economics

Words/phrases associated with Economics	Example
degree in economics	Tiffany earned her degree in economics from a prestigious university.
economics professor	Mr.Smith is a renowned economics professor known for his research in international trade.
the economics of…	The economics of sustainable development requires a balance between environmental and economic factors.
agricultural economics	Agricultural economics examines the economic aspects of farming, including production and distribution.
basic economics	It's important for everyone to have a basic understanding of economics to make informed financial decisions.
capitalist economics	Capitalist economics emphasizes the role of the market and private ownership in driving economic growth.

III. What is Economic?

To distinguish Economy, Economics, Economic and Economical, let's find out the definitions and words/phrases associated with Economic!

1. The usage of Economic

What is Economic? According to the Cambridge dictionary, Economic functions as an adjective, meaning: relating to trade, industry, or money. For example:

The country has been in a very poor economic state ever since the decline of its two major industries.
The government's economic policies have led us into the worst recession in years.

2. Words and phrases associated with Economic

Let's explore the words/phrases associated with Economic through the following illustrative examples!

Words/phrases associated with Economic	Example
economic conditions/ situation	The global economic conditions have a significant impact on the stability of local businesses.
economic boom/ expansion/ upswing	The tech industry experienced an economic boom in the late 1990s, with many companies seeing rapid growth and high profits.
economic downturn/ slowdown	During the economic downturn of 2008, many people lost their jobs and homes.
economic collapse/ crisis/ depression	The economic collapse of the small island nation was caused by mismanagement of its resources and government corruption.
economic recovery/ regeneration	The government implemented a series of policies to stimulate economic recovery after the recession.
economic benefits/ interests	Investing in renewable energy sources not only helps the environment but also brings significant economic benefits in the form of job creation and reduced energy costs.
economic data/ figures/ statistics	Economists rely on a wide range of economic data, such as GDP growth, inflation rates, and unemployment figures, to analyze the state of an economy.
economic factor/ issue/ problem	Technological innovation is often cited as a crucial economic factor in the growth of modern economies.
economic equality/ inequality/ justice	Many social justice advocates are working towards achieving economic equality, ensuring that all members of society have access to the same economic opportunities and benefits.
economic freedom	Some consider the foundations of economic freedom to be personal choice, voluntary exchange, and open markets.

IV. What is Economical?

To distinguish Economy, Economics, Economic and Economical accurately, let's explore what Economical means and the words/phrases associated with it!

1. The usage of Economical

What is Economical? According to the Cambridge dictionary, Economical functions as an adjective, meaning: not using a lot of fuel, money, etc. For example:

There's increasing demand for cars that are more economical on fuel.
What's the most economical way of heating this building?

2. Words and phrases associated with Economical

Let's explore the words/phrases associated with Economical with illustrative examples!

Words/phrases associated with Economical	Example
economical on something	There is increasing customers’ demand for renewable-energy devices that are more economical on fuel.
economical with something	It's a shame this industry could not be a bit more economical with the costs.

V. Distinguish between Economy, Economics, Economic and Economical

Let's explore the difference between Economic and Economical through the table below!

	Meaning	Example
Economy	Noun: the system of trade and industry by which the wealth of a country is made and used/ the saving of time, energy, words, etc.	A strong economy results in higher property prices.
Economics	Noun: the way in which trade, industry, or money is organized, or the study of this	Alex has a bachelor of economics.
Economic	Adjective: relating to trade, industry, or money	The economic policies of the government aim to stimulate economic growth.
Economical	Adjective: not using a lot of fuel, money, etc.	Buying a fuel-efficient car can be an economical choice because it saves you money on petrol.

VI. Exercises on Economy, Economics, Economic and Economical

Let's practice through these exercises to reinforce our understanding of the concepts of Economy, Economics, Economic and Economical!

1. Exercises

Exercise 1: Fill Economy, Economics, Economic and Economical in the blanks:

The _______ forecast for the country predicts a 3% growth in GDP this year.
Driving a smaller, more _______ car can save you a lot of money on fuel costs.
The _______ policies of the government aim to reduce unemployment and boost economic development.
Global trade plays a crucial role in shaping the world _______, influencing the prosperity and development of nations around the globe.
A graduate of law and _______ from Moscow State University, Robert had spent his life in academia.

Exercise 2: Choose the correct answer: Economy, Economics, Economic and Economical

The _______ policies of the government aim to stimulate job growth and investment in key industries.
1. Economic
2. Economical
3. Economy
Choosing a _______ mode of transportation, such as carpooling, can reduce your monthly expenses significantly.
1. Economic
2. Economical
3. Economics
The country's _______ has been steadily growing over the past decade, attracting foreign investors and creating new opportunities for businesses.
1. Economy
2. Economical
3. Economically
In college, Mori decided to major in _______ to better understand the principles that govern financial systems and decision-making.
1. Economics
2. Economical
3. Economically
The country's _______ is showing signs of recovery after a period of recession, with increased consumer spending and business investments.
1. Economic
2. Economy
3. Economically

2. Answer

Exercise 1	Exercise 2
Economic Economical Economic Economy Economics	A B A A B

VII. Turn Your IELTS Goals Into Reality

PREP hopes this article about Economy, Economics, Economic and Economical has helped you understand the concepts, usage and accurately distinguish between these four terms. If you’re aiming for IELTS excellence, explore these top-notch resources designed for high achievers below:

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Founder/CEO at Prep

Founder of Prep Smart Test Preparation Platform. With over 10 years of experience in teaching and test preparation, Mr. Tú has helped thousands of students achieve high scores in the IELTS exam. In addition, Mr. Tú Phạm is also a consulting expert in British Council programs and a speaker at many leading educational events, programs, and conferences.